Analysis: A LAN to the rest of the world

With Kingston Communication's announcement that it is committing to Asynchronous Digital Subscriber Line (ADSL), the UK has finally started the move to universal high-speed unmetered networking.

It's hard to over stress the implications: people who've been involved in trials in the US - and are now signing up for full commercial service - report that it's like being on a local area network with the rest of the world. Those in the UK who are fortunate enough to have fast Internet access at work will know what that means: you don't think about how long it takes to get a web page or a file, you click first and ask questions later.

On one level, KC's announcement may seem rather unimportant. The company is an anomaly: when the UK government amalgamated all the private telephone companies under the aegis of the Post Office, it let Hull Council keep control of its own telephone system. Until the liberalisation of the UK telecommunications market in the 1980s, the company was the only other public telecommunications company in the country - it was restricted to Hull, and BT had everywhere else. BT still can't operate within the city (although that's under review); so KC still has its original market of some 170,000 lines, which in a country with nearly 60 million people is, apparently, negligible.

Yet scratch the surface of the announcement and some very interesting facts arise. KC has been testing the technology for over a year: it works. It has been trying out a mixture of services, including video-on-demand, Internet access and network access: they work too both technically and commercially.

If you're a small company, you have to move fast: if you don't grab an opportunity before the big guns get going, you're lost. KC has reached the conclusion that the future lies with DSL and it wants to be there first, before BT and its pals appear at the gates. This is the first affirmation that DSL makes good sense in a European context.

Things are different in the US, where DSL has gone from bright new hope to impossible and back to best thing. America Online announced it will offer DSL access for $50 (£30) a month, and the various telcos, cool at first, are seeing the technology as immensely important. It's a mistake to see this purely in terms of service to the customer, though: remember, these are telephone companies. The Internet has changed the rules - with unmetered local call access, people are logging on and staying on all evening. These calls are now the major component of some telco's daily traffic: they generate no revenue but take up a lot of capacity. By introducing DSL, the telcos filter off this traffic before it gets into the exchange and turn it into a new revenue stream. Suddenly, the telco's cries that DSL wouldn't work because of interference, or bad copper lines, or backbone congestion, or lack of standards, are stilled.

In Europe, where local calls are metered, the pattern of usage remains closer to the pre-Internet model of a smattering of short calls and a few longer ones. The pressure on telcos is much less: it takes someone like KC, with its own intense competitive pressures to make that initial step towards offering the service. BT is a languid monster by comparison: its ADSL pilot seems very similar to KC's and even includes some of the same companies, but the pilot isn't starting until KC's is long over.

Experience shows telcos only innovate when they absolutely have to. The ISDN legacy shows we wouldn't normally expect to have a nationwide ADSL service until BT is forced into creating it either by regulation (making BT lease its copper lines to anyone who wants them) or competition (cable modems, wireless, satellite).

Of course, BT will have to deliver the service sooner or later. Once you've sampled what's on offer through fast, affordable data communication you really don't want anything else.

Kingston Communications has brought the date of that service forward for all of us. By demonstrating that ADSL works and is commercially sound, it is making a public affirmation of the technology's promise. Moreover, KC has shown that if you want to be a player in the telecommunications market of the 21st century, you must be prepared to go with ADSL and go soon. That last lesson won't be lost on BT, and we'll all be the winners as a result.